The Project, launched in January 2003, has two main objectives. First, it will assist Indian trade negotiators, policy makers and other stakeholders in understanding the development dimension of key trade issues, particularly as they related to the current WTO agenda. Secondly, it will strengthen the country's human and institutional capacities for analysis of globalization-related issues and facilitate a policy environment that will support and sustain a more equitable process of globalization.
Multi lateral Trading system and developing countries
Developing countries need to frame a broad set of trade initiatives within an appropriate macroeconomic environment and a comprehensive approach to development. They also need to be active in exercising their rights and obligations in the multilateral trading system. Formal participation in the multilateral trading system through the WTO offers many advantages to developing countries. They recognise that trade rules and multilaterally negotiated agreements can affect their access to markets, help them withstand domestic pressures opposed to policy reform and improve the credibility of their domestic reform process.
However they face many challenges .
Implementing the new WTO agreements and obligations demands much from the institutional and human capacities of developing countries. The Uruguay Round addressed regulatory policies and business practices that can restrict trade behind borders, and developing countries took on unprecedented obligations to reform trade procedures and much domestic regulation. These obligations covered such issues as import licensing procedures, customs valuation, intellectual property law and technical, sanitary and phyto-sanitary standards. But do poor countries have the institutional capacity for these reforms? Can they finance the necessary investments in the light of other development priorities? And can compliance bring benefits if it is not part of broader trade policy reforms?
Considerable capacity is needed for effective participation in the design, enforcement and use of the rules and institutional mechanisms that shape the global economy. Being latecomers to full participation in the trading system and negotiating rounds, the less advanced developing countries had great difficulty participating effectively in the Uruguay Round negotiations. They lacked the capacity for effective participation in the negotiation process, and they had limited impact on the design of
the new rules. As the WTO process becomes even more complex and technical, it is essential that developing countries develop the capacity to articulate their interests and defend their rights in the WTO framework.
Gaining access to export markets of interest will be a major challenge for developing countries. While external constraints may not be the primary reason for slow export growth from poor countries, market access must be seen as an integral part of the capacity building agenda. Barriers to agriculture may, for example, impede the export of agricultural and labour-intensive products, hampering efforts to diversify into downstream processing and into higher value-added and faster growing products. In other words, trade barriers repress the development of trade capacity. Product standards and other import requirements in industrial countries – such as environmental, labour and health standards – can also pose a significant challenge to developing country export capacity. While product standards have an important role in the effective functioning of markets and trade, developing countries often lack information on such requirements – and the technical and financial resources to comply. They also have limited capacity to participate in the design and implementation of product standards, to set up certification and accreditation facilities, and to bring disputes when standards discriminate against their exports.
India had embarked upon the path of economic liberalization in the early nineties in a major way. The process of economic liberalization and the pursuit of market-driven economic policies are having a significant impact on the economic landscape of the country.
An important consequence of India's economic liberalization was the adoption of the multilateral trading regime under the World Trade Organization (WTO). This multilateral trading regime is a rule-based institutional system that calls for significant obligations on WTO members. This new regime is a reality and has important ramifications for a developing country like India. Strategies and preparedness for globalization is of paramount importance today.
What is Trade Related Capacity Building?
Trade Related Capacity Building (TRCB) refers to a coherent set of activities by donors and partner countries designed to enhance the ability of policymakers, enterprises and civil society actors to:
• Work together to develop and implement effective trade policies and strategies
• Improve trade performance through policy and institutional strengthening
• Participate and benefit from the institutions, negotiations and processes that shape national trade policy and the rules and practices of international trade.
The goal of TRCB is to enhance the capacity of partner country stakeholders to manage their own trade agendas .
To participate effectively in the multilateral trading system, capacity creation is essential and capacity constraints to be eliminated.
Capacity to negotiate effectively on trade issues requires
• Adequate understanding of the issues under negotiation
• Timely access to information and resources on trade issues
• Analytical skills necessary to assess the impact of different proposals and agreements on their economies
• Capacity to influence or set the agenda and pace of negotiations
• Capacity to fulfill commitments to the multilateral trading system
without jeopardizing important development goals
• Capacity to exploit trading opportunities
Finding a solution to these capacity constraints is not an easy task. But it is clear that some of the problems require short-term actions while the others would be better addressed through longer-term measures.
Key priority areas for its trade activities
• Building Consensus and Common Positions on Trade Issues
• Policy Advocacy and Advisory Services
• Trade Policy Research and Analysis
• Training
Indian TRCB activity
To facilitate and support capacity building, Government of India, UNCTAD and DFID/UK are jointly implementing a five year programme titled-“Strategies and Preparedness for Trade and globalization in India”
This programme has two components, Component 1 and 2.
Component 1 of the project, which is being implemented since march 2003,is already assisting negotiators and policy makers, in enhancing understanding of the development and pro-poor dimension of key trade issues relating to the Doha work programme .
Component 2 of the programme aims to strengthen human and institutional capacities among stakeholders, as well as a policy environment that will support and sustain a more equitable process of globalization. Component 2 will facilitate building capacities on trade competitiveness in selected sectors/regions.
Component 1 focuses on ‘upstream' activities (assisting trade negotiators and policy makers), while component engages in “down stream' actions, to build stake holder capacities for understanding and managing the impact of globalization on their respective constituencies. The action under both these components are interrelated, for instance, when research and analysis of negotiating issues (A component 1 activity) is disseminated to stake holders and their response fed back to the negotiators (A component 2 activity)
The focus of activities under component 2 is on strengthening human and institutional capacities of stake holders and policy makers, to take better informed decisions, and formulate their strategies with a greater level of understanding of the impact and the opportunit6ies for globalization, particularly wit a pro-poor perspective. To achieve the above objective, component 2 of the programme will support activities that enable capacity building of stakeholders through
• Better understanding and analysis of trade issue for developing medium term sector strategy
• Build institutional and human capacities to deal with existing and emerging trade issues
• Dissiminate knowledge acquired in the programme widely and deeply in easily digestible language to the stake holders
• Provide feed back inputs to the government to enact sectoral policies and schemes focused on meeting the opportunities and challenges of world trade.
TRCB in selected sectors
UNCTAD in consultation with MoIC and DFID has selected five sectors for TRCB activities. These sectors are textiles and Clothing (including handlooms), agriculture, fisheries, small& cottage sector (including handicrafts and leather footwear) and retail services. Even with in the sector, there are groups that face relatively more adverse forms of disadvantage, since enterprise with in a sector are not homogeneous. They vary according to the size, location, infrastructure support, access to credit, technology etc. For example, in the textile sector, unorganized handloom weavers from certain socially disadvantaged groups in particular geographies would be at the bottom with in this sector given the multiple levels of disadvantages that they face as producers.
To identify trade related opportunities and threats for the poor section of the society focusing on unorganized and decentralized sectors. Capacity building for better use of trade issues focusing d on market access, entry and trade defense measures. Dissemination of trade related information to stake holders through website, news letters, media etc. To build up a forum of public private dialogue on trade issues and formation of a consultative body to develop trade strategy and continual refinement of trade policy on regular interval or as per industry needs.
Textile and Clothing sector
Post quota regime of world textile and clothing sector is full of challenges and opportunities. India is expected to be a powerful textile power, playing a significant role in the world market. To reap the benefits of a free textile and clothing market we need to develop our strategies and prepare for the challenges. Need of the hour is to sensitize the industry to emerging trade issues in the context of globalization and its effect on Indian textile and clothing sector
Handloom Sector
The informal sector like handloom is important from the point of view of their size and employment potential. The handloom industry is the largest employer in the country after agriculture, with over 16 million weavers and their families drawing sustenance from it, apart from the loom- and reel-makers, dyers, warp-winders, sizers and other support, with women constituting a substantial part. The significance of this sector along with their inseparable link with country's cultural heritage further expounds its vitality. However, it is facing many challenges in the era of globalization and even there is apprehension whether it can with withstand the competitive pressure. Handloom woven fabrics are fast disappearing from the market due to its inability to compete with the power loom sector and also due to change in consumers preferences.
It is imperative to shed the traditional mindset of handloom versus power loom and Indian T&C sector need to have an integrated approach and develop synergies among the various players, to capture the opportunities opened up in a post quota regime of world textile and clothing market. There is an immediate need for handloom sector to emerge as a specialized sector, seeking niches in its area of strength and also build up it capacity.
What is Indian Merchants' Chamber role
Indian Merchants' Chamber along with Textiles Committee has been selected by UNCTAD as a Tier-1 partner in implementing this project for textile and clothing sector. As a first step, IMC is focusing specifically on the Indian Handloom sector
Under the broader objective of sensitizing the industry to emerging trade issues in the context of globalization and its effect on Indian textile and clothing sector. IMC is working on formation of virtual sector net work of all the stake holders, b uilding networks of existing trade related institutions, establishing an effectively functioning trade portal, dissemination and enhancing awareness through regular newsletters etc, undertaking analytical studies on specific issue. We are carrying out all these activities through the support of a number of Tier 2 partners.
